If a Country Is Trying to Recover from a Recent

question 127

Multiple Choice

If a country is trying to recover from a recent recession,it is unlikely the central bank will decide to ________ because it would ________.

• A)increase taxes;increase aggregate demand
• B)institute a tax cut;increase aggregate demand
• C)raise interest rates;decrease aggregate demand
• D)lower interest rates;decrease aggregate demand
• E)raise interest rates;increase aggregate demand

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Definitions:

Direct Labor Hours

The total amount of time spent by employees directly involved in manufacturing products or providing services.

Overhead Volume Variance

The flexible budget at standard volume less the overhead applied. It is an estimate of the unused or overused fixed plant capacity.

Planned Overheads

The estimated costs of indirect materials, labor, and other expenses necessary to run operations that are budgeted for a specific period.

Actual Overheads

The real costs incurred in the day-to-day operation of a business, including utilities, rent, and maintenance.